Oracle(US:ORCL)2025-09-09 22:02Financial Data and Key Metrics Changes - Oracle's remaining performance obligations (RPOs) reached $455 billion, up 359% year-over-year and $317 billion from the end of Q4 [4] - Total cloud revenue increased by 27% to $7.2 billion, with cloud infrastructure revenue up 54% to $3.3 billion [4][5] - Total revenues for the quarter were $14.9 billion, an 11% increase from the previous year, surpassing the 8% growth reported in Q1 last year [6] - Non-GAAP EPS was $1.47, while GAAP EPS was $1.01, with a non-GAAP tax rate of 20.5% [7] - Operating cash flow for Q1 was $8.1 billion, while free cash flow was negative $362 million [7] Business Line Data and Key Metrics Changes - Cloud infrastructure revenue grew 54%, with OCI consumption revenue up 57% [5] - Cloud database services revenue increased by 32%, with annualized revenues nearing $2.8 billion [5] - Cloud application revenue was $3.8 billion, up 10%, while strategic back-office application revenue rose 16% to $2.4 billion [6] Market Data and Key Metrics Changes - Oracle's cloud infrastructure is expected to grow 77% to $18 billion in fiscal year 2026, with projections of $32 billion, $73 billion, $114 billion, and $144 billion over the next four years [9] - The company anticipates total revenue growth of 16% in constant currency for fiscal year 2026 [10] Company Strategy and Development Direction - Oracle is positioning itself as a leader in AI workloads, having signed significant contracts with major AI companies [4] - The company is focusing on both AI training and inferencing markets, emphasizing the importance of its AI database and the ability to vectorize data [16][72] - Oracle aims to provide a comprehensive cloud solution, offering customers flexibility between public and dedicated cloud regions [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for Oracle Cloud Infrastructure and the potential for RPO to exceed half a trillion dollars [9] - The company is optimistic about its ability to accelerate revenue and profit growth, driven by the large RPO backlog [8][10] - Management highlighted the unique advantages of Oracle's infrastructure and application capabilities, particularly in the context of AI [44][46] Other Important Information - Oracle's CapEx for fiscal year 2026 is projected to be around $35 billion, primarily for revenue-generating equipment [8][54] - The company has reduced its shares outstanding by a third over the last decade, repurchasing 440,000 shares for $95 million in the current quarter [8] Q&A Session Summary Question: What else is driving Oracle's forecasts beyond AI training? - Management noted a significant demand for inferencing capacity, indicating that many companies are seeking Oracle's solutions for this need [23] Question: How will Oracle ensure its AI training business remains differentiated? - Oracle's competitive edge lies in its ability to move data quickly and efficiently, which translates to cost advantages for customers [60] Question: What is the expected ROI on the infrastructure build-out for new contracts? - Management explained that CapEx is closely monitored and spent just before generating revenue, allowing for a profitable and efficient operation [53] Question: How soon will enterprise customers adopt the new Oracle AI Database? - Management believes there is insatiable demand for AI capabilities, and Oracle is well-positioned to meet this demand with its AI database and cloud offerings [73]